Overall credit terms and conditions tightened somewhat between September and November 2024. The tightening of overall credit terms and conditions – reflected in both price and non-price terms – was in line with the expectations of such tightening expressed in the September 2024 survey. Respondents attributed the above-mentioned tightening of price and non-price terms mainly to a deterioration in general market liquidity. A small net percentage of survey respondents expected overall terms to tighten further across all counterparty types in the three months ahead (i.e. in the period from December 2024 to February 2025) (Chart 1).
For central counterparties (CCPs), survey respondents reported that changes in CCPs’ practices, including margin requirements and haircuts, had contributed to a slight tightening in price and non-price terms. They reported increased resources allocated and attention paid to the management of concentrated credit exposures over the review period. Hedge funds’ use of financial leverage and the additional availability of unutilised leverage increased over the period. Respondents reported increases both in the intensity of efforts made to negotiate more favourable terms for all counterparties and in the provision of differentiated terms for most-favoured clients. A small net percentage of respondents reported a slight increase in the volume, duration and persistence of valuation disputes across all counterparty types.